Mnuchin announces steps to avoid broaching debt limit

WASHINGTON (AP) — Treasury Secretary Steven Mnuchin told Congress Wednesday that he will start taking emergency measures this week to keep the government from going above the debt limit when it goes back into effect on Friday.

In a letter to congressional leaders, Mnuchin said he would begin using the "extraordinary measures" at noon on Friday. Mnuchin said he was ready to use various bookkeeping maneuvers to buy time until Congress raises the debt limit.

In September, Congress agreed to suspend the debt limit, allowing the government to borrow as much as it needed. But that suspension ends on Friday. The debt that will be subject to the limit currently stands at $20.5 trillion.

The Congressional Budget Office estimated in a recent report that Mnuchin has enough maneuvering room to stay under the limit until late March or early April. However, some private experts have said that Mnuchin could run out of bookkeeping maneuvers as early as February.

In his letter, Mnuchin said his first step on Friday will be to suspend sales of Treasury securities that are used by state and local governments.

"As I have said previously, honoring the full faith and credit of the United States is a critical commitment," Mnuchin said. "I encourage Congress to raise the debt limit at the first opportunity so that we can proceed with our joint priorities."

If the debt ceiling is not raised by the time Mnuchin runs out of maneuvering room, the government would not be able to borrow to pay its obligations including sending out Social Security and other benefit checks.

It would also be unable to borrow to meet interest payments on the debt it has already incurred, raising the prospect of a market-rattling default on the federal debt.

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